Nine Lives is a new outdoor clothing and gear consignment store in Eugene, Oregon. It will be run by Jim Gearboy, a veteran of the outdoor industry who is familiar with the outdoor community in Eugene. The store offers a unique selection of used goods, superior customer service, and reasonable prices. Jim has secured a location with good foot traffic and easy accessibility. He will efficiently layout the store to increase sales and provide attentive customer service. Jim’s passion and industry knowledge will help the store quickly become profitable. Nine Lives is projected to achieve profitability by month six and generate $45,000 in revenue by year three.

Used Sports Equipment Store Business Plan Example

1.1 Mission

Nine Lives’ mission is to provide quality outdoor clothing and gear at reasonable prices. We exist to attract and maintain customers, and when we adhere to this maxim, everything else will fall into place. Our services will exceed customer expectations.

1.2 Objectives

The objectives for the first three years of operation include:

– Create a retail store with the primary goal of exceeding customer expectations.

Increase the number of clients served by at least 20% per year through superior performance and selection.

– Decrease dependence on nonrenewable resources by using reused goods.

– Obtain annual revenues exceeding $50,000.

Company Summary

Nine Lives, located in Eugene, OR, will be a consignment shop for outdoor clothing and gear. Nine Lives will offer used outdoor clothing and gear at reasonable prices, making the outdoors accessible to a wider range of people. The items will be sold on consignment, meaning Nine Lives will sell other owners’ items and pay them when sold. Typically, the consignment items will be used, including new manufacturers’ closeouts and seconds. Occasionally, Nine Lives will purchase manufacturers’ closeouts and seconds outright, but only when there are significant savings and a high chance of quick sales.

The business will become profitable in month six and experience steady growth each consecutive month.

2.1 Company Ownership

Nine Lives will be an Oregon corporation owned solely by Jim Gearboy.

2.2 Start-up Summary

Nine Lives’ start-up costs will include:

– Computer system with CD-RW, printer, and Internet connection.

– Copier and fax machine.

– Assorted office supplies.

– Used office furniture.

– Display equipment, including racks, hangers, and shelves, purchased used from a recent retailer bankruptcy.

– Mirrors for theft protection, also sourced used.

– Bar code label printer, scanner, and corresponding inventory management software.

– Advertising in local outdoors publications and the general newspaper outdoor section.

– Legal fees for the creation of the corporation and general business forms.

The items appropriate for depreciation will be depreciated using the straight-line method.

Used Sports Equipment Store Business Plan Example

Start-up

Requirements

Start-up Expenses

– Legal: $1,000

– Advertising: $1,000

– Office supplies: $150

– Other: $0

– Total Start-up Expenses: $2,150

Start-up Assets

– Cash Required: $14,150

– Start-up Inventory: $0

– Other Current Assets: $0

– Long-term Assets: $3,700

– Total Assets: $17,850

Total Requirements: $20,000

Start-up Funding

Start-up Expenses to Fund: $2,150

Start-up Assets to Fund: $17,850

Total Funding Required: $20,000

Assets

Non-cash Assets from Start-up: $3,700

Cash Requirements from Start-up: $14,150

Additional Cash Raised: $0

Cash Balance on Starting Date: $14,150

Total Assets: $17,850

Liabilities and Capital

Liabilities

Current Borrowing: $0

Long-term Liabilities: $0

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $0

Capital

Planned Investment:

– Owner: $20,000

– Other: $0

– Additional Investment Requirement: $0

– Total Planned Investment: $20,000

Loss at Start-up (Start-up Expenses): ($2,150)

Total Capital: $17,850

Total Capital and Liabilities: $17,850

Total Funding: $20,000

Products

Nine Lives will sell a range of outdoor clothing and gear, including:

– Fleece outerwear

– Rain gear (waterproof and coated nylon)

– Thermal underwear

– Synthetic clothing for sports or travel

– Hats

– Gloves

– Gaiters

– Shorts

– Pants

– Shirts

– Packs

– Sleeping bags

– Sleeping pads

– Tents

– Duffel bags

– Bicycles

– Kayaks

– Roof racks

– Canoes

– GPS

– Cookware and stoves, and more

Market Analysis Summary

The market for an outdoor clothing and gear consignment shop in Eugene is open. Eugene is an ideal community for Nine Lives as it is a hotbed for outdoor activities. Additionally, there are no other used outdoor clothing and gear stores in the area. The used outdoor stores in Bend and Portland have shown success, indicating a ripe market for Nine Lives in Eugene.

Market Segmentation

Nine Lives will focus on three groups of outdoor clothing and gear consumers:

1. Outdoor participants with limited financial resources: These customers have some discretionary income and enjoy outdoor activities. By shopping at an outdoor consignment shop, they can maximize their limited budget and acquire more or better equipment compared to traditional retail outlets.

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2. Gearheads: This group collects outdoor gear and seeks the right clothing and equipment for each occasion or activity. Better prices at Nine Lives allow them to expand their collection without spending more.

3. Bargain hunters: This group is attracted to good deals and may not necessarily need the items. They will be excited by both used items and manufacturers’ closeouts and seconds.

Used Sports Equipment Store Business Plan Example

Market Analysis:

Potential Customers, Growth, Year 1, Year 2, Year 3, Year 4, Year 5, CAGR:

Outdoor participants with limited financial resources, 9%, 27,014, 27,014, 29,445, 32,095, 34,984, 6.68%

Gearheads, 8%, 14,025, 14,025, 15,147, 16,359, 17,668, 5.94%

Bargain hunters, 8%, 10,584, 11,431, 12,345, 13,333, 14,400, 8.00%

Total, 6.76%, 51,623, 52,470, 56,937, 61,787, 67,052, 6.76%

Target Market Segment Strategy:

Nine Lives will target outdoor enthusiasts with limited financial resources. These individuals prioritize quality of life and outdoor activities over financial gains, making them ideal customers. The University of Oregon, located in Eugene, provides a large population base and an active outdoor student body for Nine Lives to draw from.

Industry Analysis:

Nine Lives will procure merchandise from various sources:

– Individuals: These individuals prefer selling their goods rather than donating them to thrift stores. They may also sell their old items to finance new ones.

– Manufacturers: Manufacturers may want to reduce inventory by partnering with consignment shops.

– Retail store closeouts: Similar to manufacturers, retail stores may seek consignment shops to lower their inventory.

– Manufacturer representatives: Representatives often have samples from multiple manufacturers and may look to sell them when they are no longer needed.

Competition and Buying Patterns:

Currently, there are no direct competitors in Eugene. However, there are two Oregon competitors with similar product offerings in Portland and Bend. Nine Lives faces competition from new retail outdoor stores like R.E.I. and McKenzie Outfitters who offer new goods at regular retail prices. Thrift stores also pose competition, although the availability of decent used outdoor clothing and equipment is limited. Functionality trumps fashion for outdoor enthusiasts, making used equipment a popular choice across different economic levels.

Strategy and Implementation Summary:

To drive both buyers and suppliers, Nine Lives will heavily promote the store through advertisements in local outdoor magazines/journals and by reaching out to outdoor manufacturers, retail outlets, and manufacturer representatives. The store aims to turn over inventory regularly by offering reasonable prices that provide good value to customers.

Competitive Edge:

Nine Lives’ competitive advantage lies in its unique selection of used clothing and gear not found elsewhere in the city. Additionally, the store emphasizes personalized customer service and maintains a database of customers and their purchasing history.

Sales Strategy:

Nine Lives will implement proper display techniques and lighting to enhance the shopping experience. The store will feature best-selling items in the most accessible area and rotate unsold stock every 90 days to encourage frequent visits. Bar code price labels will be used for inventory control and to discourage price manipulation.

Sales Forecast:

The first month will be dedicated to preparing the store, and no sales activity is expected. Month two will mark the official opening, with slow business as inventory is built up through advertising and promotion. Sales activity is projected to steadily increase from month four onward.

Used Sports Equipment Store Business Plan Example

Sales Forecast

Year 1 Year 2 Year 3

Sales

Outdoor participants-limited $$$ $135,152 $185,214 $210,412

Gearheads $50,048 $63,541 $68,547

Bargain hunters $49,570 $62,545 $65,122

Total Sales $234,770 $311,300 $344,081

Direct Cost of Sales

Year 1 Year 2 Year 3

Outdoor participants-limited $$$ $67,576 $92,607 $105,206

Gearheads $25,024 $31,771 $34,274

Bargain hunters $24,785 $31,273 $32,561

Subtotal Direct Cost of Sales $117,385 $155,650 $172,041

5.3 Milestones

Nine Lives will have several milestones early on:

1. Business plan completion. This road map will be indispensable for the ongoing performance and improvement of the company.

2. Completion of the store redesign and back office set up.

3. Profitability.

4. Year-to-date sales exceeding $100,000.

Milestones

Milestone Start Date End Date Budget Manager Department

Business plan completion 1/1/2001 2/1/2001 $0 Jim Marketing

Completion of store redesign 1/1/2001 2/1/2001 $0 Jim Department

Profitability 1/1/2001 6/30/2001 $0 everyone Department

Y-T-D Sales exceed $100,000 1/1/2001 6/30/2001 $0 everyone Department

Totals

Management Summary

Nine Lives is an Oregon corporation founded and owned by Jim Gearboy, who holds a business degree from the University of Oregon. Jim’s undergraduate experience includes being President of U of O’s Outdoor Program, where he was responsible for motivating members to pursue organizational goals and managing the organization. He also worked at R.E.I. as a sales associate, which gave him valuable insights into running a company. After graduation, Jim became manager of the R.E.I., but desired to be closer to customers, leading him to open his own store in the outdoor industry.

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6.1 Personnel Plan

Jim will work full-time as owner/general manager of Nine Lives. By month two, the company will bring on one full-time sales associate, followed by a second sales associate by month four. By month seven, another sales associate will be added.

Personnel Plan

Year 1 Year 2 Year 3

Jim $24,000 $30,000 $36,000

Sales associate $15,840 $17,500 $18,000

Sales associate $12,960 $17,500 $18,000

Sales associate $8,640 $17,500 $18,000

Total People 4 4 4

Total Payroll $61,440 $82,500 $90,000

Financial Plan

The following sections outline the important financial details.

7.1 Important Assumptions

The table below highlights important financial assumptions.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis indicates that monthly revenue needs to be $15,760 to break even.

Used Sports Equipment Store Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: $15,760

Assumptions:

– Average Percent Variable Cost: 50%

– Estimated Monthly Fixed Cost: $7,880

(Projected) Profit and Loss:

Pro Forma Profit and Loss:

Year 1 Year 2 Year 3

Sales $234,770 $311,300 $344,081

Direct Cost of Sales $117,385 $155,650 $172,041

Other $0 $0 $0

Total Cost of Sales $117,385 $155,650 $172,041

Gross Margin $117,385 $155,650 $172,041

Gross Margin % 50.00% 50.00% 50.00%

Expenses:

Payroll $61,440 $82,500 $90,000

Sales and Marketing and Other Expenses $2,400 $2,400 $2,400

Depreciation $1,200 $1,200 $1,300

Rent $18,000 $1,800 $1,800

Rent $804 $804 $804

Leased Equipment $0 $0 $0

Utilities $1,500 $1,500 $1,500

Payroll Taxes $9,216 $12,375 $13,500

Other $0 $0 $0

Total Operating Expenses $94,560 $102,579 $111,304

Profit Before Interest and Taxes $22,825 $53,071 $60,737

EBITDA $24,025 $54,271 $62,037

Interest Expense $0 $0 $0

Taxes Incurred $5,492 $13,268 $15,437

Net Profit $17,333 $39,803 $45,299

Net Profit/Sales 7.38% 12.79% 13.17%

(Projected) Cash Flow:

The following chart and table indicate projected cash flow.

Used Sports Equipment Store Business Plan Example

Pro Forma Cash Flow:

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Sales $234,770 $311,300 $344,081
Subtotal Cash from Operations $234,770 $311,300 $344,081
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $234,770 $311,300 $344,081
Cash Spending $61,440 $82,500 $90,000
Bill Payments $150,306 $203,071 $208,991
Subtotal Spent on Operations $211,746 $285,571 $298,991
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Net Cash Flow $23,024 $25,729 $45,090
Cash Balance $37,174 $62,903 $107,993

Projected Balance Sheet:

7.5 Projected Balance Sheet

The following table indicates the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Cash $37,174 $62,903 $107,993
Inventory $20,181 $26,760 $29,578
Other Current Assets $0 $0 $0
Total Current Assets $57,355 $89,663 $137,571
Long-term Assets $3,700 $3,700 $3,700
Accumulated Depreciation $1,200 $2,400 $3,700
Total Long-term Assets $2,500 $1,300 $0
Total Assets $59,855 $90,963 $137,571
Current Liabilities $24,672 $15,976 $17,285
Long-term Liabilities $0 $0 $0
Total Liabilities $24,672 $15,976 $17,285
Paid-in Capital $20,000 $20,000 $20,000
Retained Earnings ($2,150) $15,183 $54,987
Earnings $17,333 $39,803 $45,299
Total Capital $35,183 $74,987 $120,286
Total Liabilities and Capital $59,855 $90,963 $137,571
Net Worth $35,183 $74,987 $120,286

Business Ratios:

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5932, Used Merchandise Stores, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 32.60% 10.53% 6.20%
Percent of Total Assets
Inventory 33.72% 29.42% 21.50% 40.70%
Other Current Assets 0.00% 0.00% 0.00% 23.80%
Total Current Assets 95.82% 98.57% 100.00% 80.80%
Long-term Assets 4.18% 1.43% 0.00% 19.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 41.22% 17.56% 12.56% 47.60%
Long-term Liabilities 0.00% 0.00% 0.00% 12.00%
Total Liabilities 41.22% 17.56% 12.56% 59.60%
Net Worth 58.78% 82.44% 87.44% 40.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 31.00%
Selling, General & Administrative Expenses 43.09% 37.50% 37.00% 17.10%
Advertising Expenses 1.02% 0.77% 0.70% 1.80%
Profit Before Interest and Taxes 9.72% 17.05% 17.65% 1.40%
Main Ratios
Current 2.32 5.61 7.96 2.11
Quick 1.51 3.94 6.25 0.80
Total Debt to Total Assets 41.22% 17.56% 12.56% 59.60%
Pre-tax Return on Net Worth 64.87% 70.77% 50.49% 3.40%
Pre-tax Return on Assets 38.13% 58.34% 44.15% 8.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.38% 12.79% 13.17% n.a
Return on Equity 49.27% 53.08% 37.66% n.a
Activity Ratios
Inventory Turnover 10.91 6.63 6.11 n.a
Accounts Payable Turnover 7.09 12.17 12.17 n.a
Payment Days 27 38 29 n.a
Total Asset Turnover 3.92 3.42 2.50 n.a
Debt Ratios
Debt to Net Worth 0.70 0.21 0.14 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $32,683 $73,687 $120,286 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.25 0.29 0.40 n.a
Current Debt/Total Assets 41% 18% 13% n.a
Acid Test 1.51 3.94 6.25 n.a
Sales/Net Worth 6.67 4.15 2.86 n.a
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
1 2 3 4 5 6 7 8 9 10 11 12

Pro Forma Profit and Loss:

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $6,750 $8,000 $12,117 $13,342 $15,923 $22,711 $24,997 $28,840 $32,457 $32,940 $36,693
$0 $3,375 $4,000 $6,059 $6,671 $7,962 $11,356 $12,499 $14,420 $16,229 $16,470 $18,347
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $3,375 $4,000 $6,059 $6,671 $7,962 $11,356 $12,499 $14,420 $16,229 $16,470 $18,347
$0 $3,375 $4,000 $6,059 $6,671 $7,962 $11,356 $12,499 $14,420 $16,229 $16,470 $18,347
$0 $3,375 $4,000 $6,059 $6,671 $7,962 $11,356 $12,499 $14,420 $16,229 $16,470 $18,347

Pro Forma Cash Flow:

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$0 $6,750 $8,000 $12,117 $13,342 $15,923 $22,711 $24,997 $28,840 $32,457 $32,940 $36,693
$0 $6,750 $8,000 $12,117 $13,342 $15,923 $22,711 $24,997 $28,840 $32,457 $32,940 $36,693
$2,000 $3,440 $3,440 $4,880 $4,880 $4,880 $6,320 $6,320 $6,320 $6,320 $6,320 $6,320
$30 $1,169 $8,777 $6,740 $10,533 $9,814 $12,306 $18,418 $17,514 $20,735 $22,753 $21,516
$2,030 $4,609 $12,217 $11,620 $15,413 $14,694 $18,626 $24,738 $23,834 $27,055 $29,073 $27,836
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Pro Forma Balance Sheet

Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $14,150 $12,120 $14,261 $10,043 $10,540 $8,469 $9,698 $13,782 $14,041 $19,047 $24,450 $28,317 $37,174
Inventory $0 $0 $3,713 $4,400 $6,664 $7,338 $8,758 $12,491 $13,748 $15,862 $17,851 $18,117 $20,181
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $14,150 $12,120 $17,973 $14,443 $17,204 $15,807 $18,455 $26,273 $27,790 $34,909 $42,301 $46,434 $57,355
Long-term Assets
Long-term Assets $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700 $3,700
Accumulated Depreciation $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200
Total Long-term Assets $3,700 $3,600 $3,500 $3,400 $3,300 $3,200 $3,100 $3,000 $2,900 $2,800 $2,700 $2,600 $2,500
Total Assets $17,850 $15,720 $21,473 $17,843 $20,504 $19,007 $21,555 $29,273 $30,690 $37,709 $45,001 $49,034 $59,855
Liabilities and Capital
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $874 $8,557 $6,388 $10,208 $9,411 $11,691 $17,838 $16,825 $19,975 $22,040 $20,666 $24,672
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $874 $8,557 $6,388 $10,208 $9,411 $11,691 $17,838 $16,825 $19,975 $22,040 $20,666 $24,672
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $874 $8,557 $6,388 $10,208 $9,411 $11,691 $17,838 $16,825 $19,975 $22,040 $20,666 $24,672
Paid-in Capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Retained Earnings ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150) ($2,150)
Earnings $0 ($3,004) ($4,934) ($6,395) ($7,554) ($8,254) ($7,986) ($6,414) ($3,985) ($115) $5,111 $10,518 $17,333
Total Capital $17,850 $14,846 $12,916 $11,455 $10,296 $9,596 $9,864 $11,436 $13,865 $17,735 $22,961 $28,368 $35,183
Total Liabilities and Capital $17,850 $15,720 $21,473 $17,843 $20,504 $19,007 $21,555 $29,273 $30,690 $37,709 $45,001 $49,034 $59,855
Net Worth $17,850 $14,846 $12,916 $11,455 $10,296 $9,596 $9,864 $11,436 $13,865 $17,735 $22,961 $28,368 $35,183

Used Sports Equipment Store Business Plan Example

Business Plan Outline

  • Executive Summary
  • Company Summary
  • Products
  • Market Analysis Summary
  • Strategy and Implementation Summary
  • Management Summary
  • Financial Plan
  • Appendix

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